Yes, the iPod has come a long way since its launch in October, 2001. That's when Steve Jobs showed off a device that promised "1,000 songs in your pocket" for $400. Today's new iPod touch could promise "a digital camera and 70,000 apps in your pocket" for half the price.

The iPod could arguably be the most important product in Apple's entire history. Over the last 8 years, Apple has made the iPod one of the biggest consumer electronics hits of all time, pushing out more than a dozen new models and selling more than 200 million units. The iPod saved Apple financially, gave the Mac a big momentum boost over the past few years, and helped finance the iPhone, Apple's current growth story.

Today's announcements come as the iPod shifts roles within Apple. After years as a growth driver for the company, the iPod business -- as large and diverse as it is -- is now shrinking. Apple warned investors on its last earnings call that it expects its traditional MP3 players -- the iPod classic, nano, and shuffle -- to continue to shrink in sales from here on. But it's betting that the iPod touch -- an extension of the iPhone line -- can lead growth.

Indeed, today's iPod touch is likely just the beginning of Apple's plans for touch-controlled portable computers. It is widely expected that Apple will release a new tablet computer next year -- which we think could look like a big iPod touch -- designed for watching videos, reading e-books and the Web, and messing around with apps.

Hasn't Apple done one of those before? Yes, the 1990s-era Newton -- a huge flop.

What's changed since then? Well, a new CEO, of course, and plenty of hardware and software technology. But Apple also has 8 years of incredible experience with the iPod, and now the iPhone, that could help the company succeed with touch computing this time around.

But that's not until next year. In the meantime, we're most interested in seeing how Apple plans to evolve the iPod family today for this holiday shopping season.